JG Chemicals IPO: Introduction
JG Chemicals Limited, founded in 1975, is India’s premier zinc oxide manufacturer. Their specialisation lies in producing zinc oxide using the French process, a method widely adopted by major producers across the Americas, Europe, and Asia. As JG Chemicals gears up for its IPO launch on March 5, 2024, let’s explore the critical aspects of this significant event.
JG Chemicals IPO: Business Model and Offerings
Zinc Oxide Production:
JG Chemicals manufactures zinc oxide using French, offering over 80 grades of this essential compound. Zinc oxide finds applications in diverse industries, including ceramics, paints, coatings, pharmaceuticals, electronics, batteries, agrochemicals, and more.
Manufacturing Facilities:
The company operates three manufacturing facilities:
West Bengal:
Two facilities in Jangalpur and Belur.
Andhra Pradesh:
The largest facility is located in Naidupeta.
Product Range:
Apart from zinc oxide, JG Chemicals produces zinc sulfate under the Luxmi brand, primarily used in agriculture as a micronutrient fertiliser.
JG Chemicals IPO: Strengths
Market Dominance:
JG Chemicals is India’s largest zinc oxide manufacturer and ranks among the top ten globally.
Its production capacity includes:
Zinc oxide:
59,904 metric tons per annum
Zinc ingots:
7,056 metric tons per annum
Zinc sulfate and related chemicals:
10,080 metric tons per annum
Solid Customer Base:
The company supplies nine top ten global tyre manufacturers and all eleven Indian tyre giants.
Financial Performance:
JG Chemicals has demonstrated robust and steady growth:
Revenue from operations:
CAGR of 34.28% from FY21 to FY23
PAT growth:
CAGR of 40.43% during the same period
JG Chemicals IPO: Risks
Customer Dependency:
JG Chemicals relies heavily on a few key customers. Any shift in these relationships could impact its financial health.
Single Product Focus:
The company’s primary product is zinc oxide. A decline in demand for this product may affect its overall performance.
Subsidiary Reliance:
JG Chemicals depends on its subsidiary, BDJ Oxides Private Limited. Any decline in the subsidiary’s performance could impact the company.
JG Chemicals IPO: Details
IPO Dates:
March 5, 2024, to March 7, 2024
Price Band:
₹210 to ₹221 per share
Total IPO Size:
₹251.19 crores
Fresh Issue:
7,466,063 shares (₹165.00 crores)
Offer for Sale:
3,900,000 shares (₹86.19 crores)
Listing:
BSE, NSE (Tentative listing date: March 13, 2024)
Conclusion
JG Chemicals’ IPO presents an exciting opportunity for investors. Understanding its strengths, risks, and financials becomes crucial as the company continues its growth trajectory. Keep an eye on this game-changer in the zinc oxide industry!
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Disclaimer:
This blog provides general information and does not constitute financial advice. Investors should conduct their due diligence before making investment decisions.
